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Héctor Madero

President & CEO, Grupo Actinver

Gonzalo Gil White

CEO, Navix

How do you assess the funds industry and the growth of the asset management sector in Mexico? HÉCTOR MADERO For the past 10 to 15 years the asset management sector […]

How do you assess the funds industry and the growth of the asset management sector in Mexico?

HÉCTOR MADERO For the past 10 to 15 years the asset management sector has been growing at about 15% annually. Penetration is still quite low compared to our GDP and that of other countries. Mexican assets represent about 9% of GDP. We currently have about 1.5 million mutual accounts in our industry, and it has been growing. We still expect the sector to grow around 18% for the next five years. It’s gaining momentum.

What kind of energy projects is Navix financing?

GONZALO GIL WHITE We cover almost the entire scope of oil field service projects. Historically, most of our energy practice has involved financing the working capital requirements for oil field services companies. Gradually, we expanded the scope of coverage of the energy sector to include contractors and sub-contractors of the Federal Electricity Commission (CFE), which is the state-owned power utility company. The legal framework that governs both types of services contracts is virtually identical and the methodology that we employ to evaluate and monitor performance risk is 100% transferable from one sector to the other.

Where do you see the most room for growth?

HM At this stage, more sophisticated products that diversify our portfolio and bring higher returns to our customers will still take time to catch up in the market. Rates are very low today, and Mexican yields on government instruments are still high compared to other countries. Many clients have little motivation to move out of fixed-income assets at this time, but it’s gradually changing. We are starting to see an appetite for new products. We were the first company to bring US equity products to the Mexican market when it was opened. We were also the first company to introduce US dollar debt funds. We also hired an outside international manager for some of our funds. We have been innovating in terms of products.

GW We view the energy sector as the most dynamic in terms of financing, and this is the reason why we have—through the FISE facility—a dedicated program targeting the working and growth capital requirements of energy sector participants. We also have a robust underwriting practice for government contractors, in sectors such as health care, communications and transportation, information systems, and civil works. Furthermore, Navix has become one of the largest lenders in certain sectors of the consumer finance industry, such as payroll discount. In this area, Navix evaluates static pools of loans and creates structures that are consistent with rating agency guidelines for AAA-rated transactions. We are in the process of making our first private securitization of consumer loans, and the terms of the transaction will enable us to recover 100% of our principal, with no subordinated component and over 1,000 bps of spread.

What’s your vision for the future?

HM We will continue to grow and double the size of our business in the next couple of years. We are focused on major areas: attracting more customers, advising them on intelligent investments, and encouraging them to invest in more diverse products. We like to call ourselves the “Merrill Lynch” of Mexico. We have 86 branches, and I think it could be easily doubled. We manage about $6.5 billion in mutual funds. Our total assets are about $20 billion.

GW I think that from a macro perspective one of the positive aspects in Mexico is that we have very healthy public finances. The lessons we learned from previous crises have brought sound and efficient economic policies. This is the principal ingredient in creating confidence for capital investments in the country and for a significant inflow of foreign investment. The country’s strategic geographical position near the biggest market in the world—the US—is also a logistical advantage for many industries. We also have a very strong advantage in terms of labor, with low costs, a highly qualified workforce, and a very strong internal market. Mexico is a great place to invest thanks to its very sound legal framework and extremely high-quality human capital, making it a market with tremendous opportunities.



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